Ten Years After the Defeat of the Free Trade Area of the Americas (FTAA) – Lessons for Current Struggles

The Democracy Center StaffNovember 20, 2015

Approx. 24 minutes

By Aldo Orellana López and Thomas Mc Donagh. First published in ALAI on 4th November, 2015.

This month marks the tenth anniversary of the defeat of the FTAA. What can we learn from that victory and the subsequent corporate counter-offensive in Latin America for our current global struggles against free trade and corporate power?

At the 4th Summit of the Americas 10 years ago in Mar del Plata, Argentina, the proposed Free Trade Area of the Americas was pronounced dead and buried. Today, 10 years on, the Democracy Center has interviewed three prominent social leaders who successfully fought, alongside hundreds of activists and organizations from across the continent, against what was intended to be the world’s largest free trade area and the greatest corporate offensive in modern history.

The aim of our interviews has been to gather as many lessons as possible, not only in relation to the victory against the FTAA but also from subsequent developments in the region. We critically explore the corporate counter-offensive in the Americas and worldwide and the evolving role of social movements in light of these developments. Finally, we present a series of reflections on the fight against the system globally and on the evolution of the international social movement.

Just as the FTAA was a crossroads, we are currently at another crossroads. We recently saw the announcement of the end of the Trans Pacific Partnership (TPP) negotiations, and the US and EU are pushing hard to finalise the TTIP and other major trade and investment deals. The weeks and months to come will determine whether the current free trade regime can be consolidated at global level, or whether it will once again fail thanks to social movement mobilisation.

Our overarching aim is to contribute to the strategic thinking for these current struggles in the Americas, Europe and the rest of the world.

The banner reads: “With young people, another world is possible. No to the FTAA/capitalism.”

FTAA: An AnnexationProject

The FTAA or Free Trade Area of the Americas was formally conceived of as a project at the first Summit of the Americas held in Miami, USA, in December 1994. In the Declaration of Principles from the Summit, Presidents unanimously declared that “a key to prosperity is trade without barriers, without subsidies, without unfair practices, and with an increasing stream of productive investments.” They decided to begin negotiations in earnest, with the aim of making FTAA a reality by 2005.

This incredibly ambitious project involving 34 countries in the Americas, all except Cuba, was to be an extension of the North American Free Trade Agreement (NAFTA), which came into force in January 1994. With a market of 800 million consumers and a GDP of $11.5 billion -40% of the world’s total at the time – the FTAA promised to be the largest free trade area in the world.

However the project, despite being promoted at the height of neoliberalist expansion, was blocked thanks to the actions of a key stakeholder that was sidelined from the beginning – organized civil society.

As in any trade deal, the FTAA draft texts were not available to the public. However, as social organizations began to gain access to leaked drafts, it became clear that this was not just a trade agreement. The various analyses of the texts quickly revealed that the project represented a serious threat to the economic sovereignty of the Latin American countries involved, while having grave implications for a range of sensitive public issues, from food security and sovereignty to public access to water and basic services; and from access to medicines to (scientific) knowledge itself.

Undoubtedly, one of the most important early findings was that the investment chapter of the FTAA, just like NAFTA’s Chapter 11, granted a series of rights and protections to foreign investors, which they could enforce through the now infamous Investor-State Dispute Settlement Mechanism (ISDS). The social organizations concluded that a system that allows corporations to bypass national laws and sue countries directly in international tribunals when they feel that their investments are being affected by a public policy was a direct attack on sovereignty and democracy.

This hugely controversial issue helped catalyse the outright rejection of the FTAA and the popular perception that this was not an agreement for trade or integration based on the common good, but rather an expansionist project into Latin America (with its huge consumer market and immense natural resources) based on the commercial and corporate interests of the United States.

Finally, after several years of intense campaigning, the FTAA was pronounced dead in Mar del Plata in 2005 – the very year it was supposed to be inaugurated.

Defeating the FTAA – Lessons From the Campaign

Campaigning, as we know, is much more of an art than a science – a creative dance between strategic planning and constantly adapting to the evolving circumstances. It was no different in the campaign against the FTAA.

Nonetheless, it’s instructive to take a look at some of the lines of strategy identified by our interviewees as being decisive for victory in the campaign. They include: a diverse but united movement with a common goal; strong analysis translated into clear messages and alternative proposals; and the ability to convince new governments of the dangers of FTAA and to bring them into the opposition camp.

1. The Hemispheric Social Alliance: A Base For Organising

Regarding the first of these, the common platform under which the movement against the FTAA was organised was the Hemispheric Social Alliance (HSA). In the words of its secretariat, the HSA emerged in the late 90s, as a product of “the fight against the proposed FTAA; it represented a pluralistic, anti-neoliberal and anti-imperialist coalition, with the participation of various social sectors (indigenous, small farmers, trade unions, students, women, etc.) and progressive currents from various NGOs and thematic and sectoral networks”.

While our respondents make it clear that the Alliance did not claim to be the only instance of struggle against the FTAA, they agree that this platform was able to achieve continental unity. As Paulina Muñoz says, “This was truly a hemispheric movement that could articulate, from all of the countries involved, a joint struggle with a common goal.”

Alberto Arroyo agrees with Muñoz, affirming that “almost total unity was achieved.” And while he acknowledges that there were internal differences, these differences were resolved through open discussion. In his words, “there was a basic principal that we did together what we agreed on, and otherwise the discussion remained open. This allowed us to be effective in the fight and not to get lost in discussions about things we didn’t agree on that were sometimes secondary; it allowed us to concentrate on what agreements there were, and, by not inhibiting discussion, we were able to move towards consensus.”

Enrique Daza also highlights unity and the ability of the organizations to cohere under one banner as a key factor in the defeat of the FTAA. For Daza the Alliance “was the product of a confluence of very heterogeneous sectors with different positions….where the main thing was the fact that various nuanced positions came together in a common struggle.”

In terms of how it operated, there were a wide variety of activities organised by the HSA during the campaign. Undoubtedly one of the most important was the Peoples Summits, which coincided with rounds of FTAA negotiations. According to Daza this obliged the movement to have a common agenda and to construct a common language. The Summits were also spaces where issues could be openly discussed, and where strategic lines of struggle were defined. These were also the moments for filling the streets of the host cities with debate and colour, and where lively dialogue could take place with local people about the ways in which the FTAA was going to affect their lives.

2. Strong Analysis, Clear Messages and Alternative Proposals

The second key aspect in the victory against the FTAA, again identified by all three of our interviewees, was the ability to persuade the public and to propose alternatives.

In the opinion of Arroyo “the No position won because we were able to convince people, it was not about someone imposing their position.” Muñoz highlights in this process, “the ability to undertake a serious, technical and professional analysis of the implications of this type of treaty in previously signed agreements, which gave strength and added value to the movement, because it was not just about ideological opposition but looking thoroughly and in depth at the implications of this treaty.”

In terms of messaging, the powerfully succinct message of “No to the FTAA!! Yes to Life!! Another America is Possible!!” became ubiquitous slogans across the region – from the banners displayed in the demonstrations, to buttons, hats and pamphlets that were distributed in the streets. As Daza recalls in relation to the ‘No FTAA’ symbol, “I think that the use of that symbol internationally was important and it managed to create among the population the idea that it was a negative thing … and we are talking about a time when there were, for example, no (online) social networks and other current tools.”

Another factor referred to by our interviewees was the ability of the Alliance to propose alternatives. As we can see from their documents, the movement was not opposed to the integration of the Americas, but they considered that any form of economic integration among their nations must, first and foremost, serve to promote equitable and sustainable development for all. That was the general vision of the “Alternative for the Americas“, an alternative proposal to the dominant model of integration of the corporations and neoliberalism embodied in the FTAA, and whose fundamental principles were democracy and participation; sovereignty and social wellbeing; equity and reducing inequalities; and sustainability.

According to Paulina Muñoz, tapping into both ideological opposition and the acute awareness in the region of the recent history of US-Latin American relations also provided important opportunities in terms of mobilising diverse groups. In a historical context characterised by the Washington Consensus and societies reeling from the impacts of structural adjustment programs, and in which several countries were re-building their democracies after long periods of US-backed dictatorship, the cultural symbolism of this latest US ‘expansion’ was not lost on organisers. According to Muñoz, “the social movement, especially the youth, had a very clear understanding of what the United States represented. There was a very clear anti-imperialist consciousness and it was important to come together and coordinate based on that”. For Daza this was fuelled by “the arrogance and domineering attitude of the United States that resulted in even some of the countries under its influence not wanting to sign it.”

3. Alliances with Governments

Lastly our interviewees highlighted the alliances created with the different leftist governments in the region as another key factor in defeating the FTAA. For Enrique Daza, the victory was largely made possible by this “confluence of the action of social movements with leftist governments.” However, all our interviewees agree that it was the social movements that fought for a long time alone against the FTAA. These new governments were, after all, a product of this and other social movement struggles on the continent. As Arroyo says, “it is often assumed that it was the progressive governments which defeated the FTAA….but the truth is that it was the movements that brought these governments to power and later the movements were able to show these new governments the seriousness of what was happening in the negotiations. Of course, once this alliance was achieved our chances of defeating the FTAA were greatly increased.”

When presidents from across the hemisphere eventually gathered for the 5th Summit of the Americas in Argentina in 2005, everyone knew it was the end of the FTAA – by now very much on its last legs. Despite the efforts of President Bush to resuscitate the agreement in Argentina, the Summit marked the death knell for the FTAA. The social movements, also gathered in Mar de Plata for the parallel Peoples Summit, had won a major victory and celebrations took over the streets of the city together with the local population.

The Regional Counteroffensive – Divide and Conquer

However, they didn’t have to wait long to see that corporations and pro-free trade governments had designed a new strategy to expand the system, probably anticipating the failure of the FTAA.

While the FTAA looked like it was dying, the United States had already signed a Free Trade Agreement (FTA) with Chile that took effect in 2004. Also, in 2003 the United States and countries in Central America began negotiations to sign the future Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), which took until 2012 to be ratified by all of the countries involved. The U.S. then tried unsuccessfully to negotiate a FTA with the Andean Community of Nations (Bolivia, Venezuela and Ecuador withdrew from the negotiations) and ended up just signing FTAs with Peru and Colombia that came into force in 2009 and 2012 respectively. The U.S. also made an attempt to negotiate a TLC with MERCOSUR during this period, but it died before even getting to the negotiating table. Finally an FTA was signed between the U.S. and Panama, coming into force in 2012.

Knowing that this strategy was succeeding, the US government wanted more, this time pushing an agreement that would transcend continental boundaries but include some Latin American countries. The Trans-Pacific Partnership (TPP), involving Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, Vietnam, the United States, Canada, Mexico, Chile and Peru, will do just that. As pointed out by Enrique Daza, the latter three countries, together with Colombia, form the Pacific Alliance – a bloc that promotes free trade in the region, in contrast to the more protectionist proposals of the countries grouped in the Southern Common Market – MERCOSUR, which is made up of Brazil, Argentina, Uruguay, Paraguay and more recently, Venezuela and Bolivia.

The TPP is not the only example of agreements that have transcended continental borders, and the United States is not the only power interested in expanding the system and its corporate interests into Latin America and beyond. Enter the European Union. Among the most important EU initiatives have been the FTA signed with Mexico in 2000 and the FTAs with Colombia and Peru (effective since 2013), after the failure of their attempt to negotiate a free trade agreement with the Andean Community of Nations. Like the U.S., when the strategy of negotiating ‘en bloc’ failed, the EU went country by country.

The European Union is also attempting to negotiate a trade agreement with the countries of MERCOSUR. However, what has been most striking in all of this process is that the government of Ecuador, a very vocal critic of the system, has finally agreed to sign on to the same FTA signed between the European Union and Colombia and Peru, a fact that has raised questions and internal social mobilization in the country.

To this whole push to expand the system must be added the rapid increase of bilateral investment treaties and investment agreements that have been multiplying rapidly since the new millennium – to over 3000 agreements today according to UNCTAD. This web of agreements, in which all of our countries participate, also gives excessive rights and protections to corporations in the same way as the investment chapters of FTAs do.

Against this background of apparent regression, one could ask oneself what happened in the region? What happened to the social movement and to the power that only a short while ago defeated the FTAA?

Overall Assessment and Lessons From The Post-FTAA Process

There are three elements that our respondents self-critically identified to explain this decline: the dynamics of corporate power; the inability of the social movement to remain united and autonomous from governments; and the lack of preparation within the movement for the work that would be required during periods of decline.

First of all, Alberto Arroyo noted that although these post-FTAA triumphs of the expansionist trade system did occur, they were not comprehensive. In his words, “neither the US nor Europe succeeded in signing FTAs with countries other than those with the most neoliberal governments in Central America, Chile, Peru, Colombia. But they haven’t been able to do the same with countries where movements were stronger and where governments were allied with social movements in the struggle against the FTAA, for example Venezuela and MERCOSUR.” They were also unsuccessful in courting the new governments of Bolivia and Ecuador when they came to power in 2006 and 2007 respectively.

But he also alerts us to some shifting regional winds. “The situation has, however, now changed because Ecuador has signed an agreement with Europe, and there is a dangerous rapprochement both by Brazil and also by MERCOSUR, with both Europe and the US.”

Brazil, which was the only country on the continent that had not signed any bilateral investment treaties, recently negotiated four new deals, including one with Mexico that is pending ratification.

Arroyo described this as a “new wave [of agreements] in which even those governments that were allies of social movements in the struggle against the FTAA, are now beginning to take a different position.”

According to Arroyo, this can be explained by the “immense power of corporations, and their ability to create economic situations that generated a perception in some governments that it was not possible to remain outside this whole process.”

Enrique Daza meanwhile believes that corporate progress has been slow but steady. In his opinion, “they have an agenda that is not maximalist…they are willing to take gradual steps to slowly implement their policy…the multinational [corporate] agenda works by gradually accumulating victories.”

In the same vein, while Arroyo maintains that this is “a mistaken attitude by these governments [to believe that they could stay outside of this system]”, he also insists that “we must try to see the issue as a political process of power, and not as a personal matter of those individuals in power. Corporations have been imposing themselves, and they have done so at a time of weakness of the movement…..global power will always await better times to try again.”

This “weakness” of the social movement that Arroyo alludes to is directly related to the second aspect of this assessment by our interviewees: the lack of autonomy of the movement in relation to leftist governments as a key factor in ultimately aiding a successful counter-attack by those seeking an expansion of the global free trade system.

On this point, according to Alberto Arroyo, “after ALBA[1] was formed, the HSA took the stance that of course we had to support them [progressive governments], but that should not have meant that we ceased being critical towards the things we didn’t agree with. Remaining silent in order not to weaken governments in relation to domestic right-wing groups was a mistake. Because after a few years what happened was that the process of structural change hoped for in these countries could not continue. For a time, it was good to support these governments, but losing autonomy weakens the movement for the next stage of struggle. So the lesson is that yes, it was a mistake not to maintain autonomy…. (because) at the end of the day the subjects of change are the people, not the governments.

Muñoz agrees with this view and notes that “there has been a co-optation of the movement using its own discourse and symbols, resulting in the weakening of the social movement.” She cites as an example recent developments in Ecuador.

Daza shares this view, but he also emphasizes the mistaken analysis by the movement itself in believing that the good times would always be here. This brings us to the third element in this analysis.

In Daza’s view “the social movement has its natural cycles, and there are moments of boom and moments of decline. So I think there was the mistaken belief that it would be in a permanent ascendance and preparations were not made during the good times for the work that would have to be done at the time of decline of the movement”.

For Daza, this error is closely related to an overestimation of the movement’s capacity to confront the next stages of transformation. In his view, “there was a general feeling in the social movement that big changes could be made quickly in Latin America. I think there was quite a bit of subjectivity in that; there was a certain overestimation of strength, an all-pervasive optimism. The movement in many countries did not have the robustness, did not have the strength to achieve any more. It was also thought that the process of internal transformation of countries could be faster, but it was more difficult than previously thought, and the strength of the right wing, even in countries where the left won, remained significant. So I do not think this has been a defeat, but an expression of reality, [an expression] of the real balance of power.”

Final Thoughts – A Global Regime, A Global Movement

So far we have garnered some important lessons from our interviewees regarding the victory of the social movement in the Americas against corporate power and free trade as represented by the FTAA, while taking a critical look at what can also be learned from subsequent events. Of course there are many more lessons to be considered in both cases.

To what extent these reflections have relevance for current movements – whether in the Americas against the TPP; or in the campaigns in the U.S. and Europe against the TPP, TTIP, TISA and CETA – is for each of us to analyse and evaluate from our respective contexts

What is beyond question is that these big inter-regional agreements, combined with new bilateral trade and investment deals, represent the most recent drive to write the rules for the global trade system in the 21st century. What the US and Europe could not do within the World Trade Organisation or with the failed Multilateral Agreement on Investment in the 1990’s, they are doing country by country, region by region. If just the TPP and TTIP were to be fully implemented, the US government would control[2] 60% of global GDP and 75% of global trade. Commenting on why the TPP is so important for his government, Obama recently said that “…we can’t let countries like China write the rules of the global economy”. One of the knock on effects of this geo-strategic maneuvering is that it will make alternative regional integration initiatives, in regions such as Latin America, extremely difficult, as countries will be under intense pressure to adhere to the dominant regime.

Given the urgency of the current juncture, we would like to present some final general reflections by our interviewees. These closing ideas aim to contribute to the strategic thinking of the worldwide movement. They point to, on the one hand, the importance of reinforcing the global nature of the struggle, and on the other, underlining the need to constantly reinvent the social movement.

For Enrique Daza “this whole process of FTAs and BITs is in essence a great conspiracy by multinationals that want to become a kind of world government that sets the course of the economy.” Therefore, as Paulina Muñoz says, it is necessary to take the criticism beyond these treaties and to “show that such agreements respond to a claim to global hegemony by the economic interests of transnationals.” All this points to the need to also conceive of the struggle as a global struggle, as Alberto Arroyo highlights, it is “a struggle for a different international structure.”

For Muñoz, a key factor for achieving this goal is related to the commitment of the entire global social movement, regardless of whether or not a country is involved in current negotiations. The idea even transcends the concept of solidarity. In her opinion, “this is not about support or solidarity, it is about taking up the peoples’ struggles as a whole. It is about your struggle being my struggle”. If this were to happen, she says, “the corporate strategy of promoting bilateral or regional agreements would not be having the relative success it is currently having.” She adds “when we consider the European Union, for example, and the FTAs signed with Colombia and Peru, and now Ecuador – the latter being the one that generates most concern – they all alert us to a clear symptom of the decline of the movement and the success of the system. That is, it has crossed a line that we can not allow.”

For Muñoz, while the case of the signing of the EU-Ecuador FTA shows up the deficiencies of the movement, it also caught people completely by surprise. According to Muñoz “a key element in the electoral success of the [Ecuadorian] government” had been its consistent vocal opposition to the free trade regime and so sectors that had been working on these issues were demobilised. Once the government’s about-face became clear, regenerating the movement has been challenging.

Making campaign work even more complicated has been the ambiguous reputation of the EU in the country. “For us it was difficult to establish our position on the FTA with Europe in Ecuador, because Europe has an image of supposed respect, an image of humanism and of being protective. That made it very difficult to show that Europe was being as aggressive as the US with its project.” Therefore, she says, “it is necessary to assert the issue at the international level, beyond our continental borders. We need to understand that to beat a global system that is expanding simultaneously on both sides of the Atlantic and from North to South, it is necessary to act simultaneously on both sides of the Atlantic, from North to South.”

Another example of the need to act globally has to do with recent concerns in official circles in Europe, including in the governments of France and Germany, about the dangers of the ISDS mechanism. These concerns are the result of the campaign in Europe against TTIP and CETA, but also the result of first-hand experience by governments in the region with what the system is capable of. Nearly half of all new ISDS cases in 2013 were against countries of the European Union. If the TTIP is signed, including ISDS, 100% of U.S. investments and corporations on European soil (47,000 companies) would be given the green light to sue national governments if they feel their interests are affected by changes to policy or court decisions. Currently only 8% of US corporations have such protection.

Given this continued pressure, the European Commission has proposed some reforms to the system. While the proposed reforms would change some ISDS procedures, they do not change the essence of the system, which is the privilege given to corporations to bypass domestic courts and sue national governments in international investment tribunals. The reform agenda has already come in for harsh criticism from European social organizations.

The point here is that even though ISDS has been a stumbling block in negotiations in Europe, we should never expect to see Germany or the European Commission proposing to reform these measures in the treaties that Europe has signed, or is attempting to sign, with the countries of Latin America or other ‘underdeveloped’ countries. And why is this? A case of doublespeak? Enrique Daza says no. “I would not call it doublespeak. They are defending the interests of their companies. They defend them in their own markets and they defend them in the conquest of foreign markets. So they do not want the standards that they are applying to Latin America to be applied to them, and that is understandable from the point of view of their business interests.”

Alberto Arroyo, in a more sarcastic tone, says that in Europe they understand perfectly what this is about, but they want to have those rights for their corporations outside of their territory. In his own words, “it is clear they do not want such a tough mechanism when it comes to them. It’s okay to apply it to the poor third-world countries, but not between themselves. They’ve got some nerve.”

The contradictions and blatant double standards on the ISDS issue of course show the need to further globalize the struggle against the system. The current mobilization on this issue is an important opportunity for the global movement.

Although, as our interviewees have pointed out, there is resistance in Latin America to new and existing trade deals, much of the movement’s energy in the region is also being used to confront ISDS cases on the ground. This often involves working with organizations resisting extractive industries, environmental pollution and the criminalization of social protest.

Figuring out how this case-by-case work on ISDS and the international movement can mutually support each other will be an important challenge going forward. Another will be to effectively inform and mobilise the ever expanding range of groups working on new issues affected by the ISDS system (public health, smoking, cancer, water, food, fracking, climate change).

This brings us to the final reflection made by our interviewees – on the need to constantly rethink and reinvent the movement.

In the case of the Americas, our respondents suggest that it would be a mistake to think that you can repeat the experience of the Hemispheric Social Alliance. In the words of Alberto Arroyo, “the movement has changed and we must enter into dialogue with this new movement in America, Europe and the rest of the world”. He remarks on the diversity of “innovative new movements with different organizational cultures and different [kinds of] political education, with forms of struggle… that do not come from the culture of the old traditional parties or movements”. He goes on “they have incredible strength, incredible creativity, use of social networks, efficient use of Twitter and use of electronic media that have achieved very interesting things. So the challenge for us is how we can learn from this culture while contributing what we have learned from our years of struggle, that is to say an inter-generational dialogue from which we could develop new strategies and new, united forms of organisational structure in order to confront this global system with a global movement.”

We are already witnessing forms of reinvention in Europe. Last month saw a major International Week of Action against FTAs – beginning with the submission of more than 3.3 million signatures in opposition to TTIP and other free trade deals, and ending with popular mobilisations across the continent, including 250,000 people on the streets of Berlin for a massive anti-TTIP demonstration. European citizens are clearly not going to take the further expansion of the free trade regime sitting down.

These reflections on the global movement leave us, as before, with more questions than answers. Our ability to respond to those questions will depend on our continuous processes of creative reflection and of permanent re-imagining of a global movement based on local and regional struggles. Upon these processes of reimagining will be built the new forms of integration, news ways of relating, and new expressions of universal principles of democracy, participation, sovereignty, social wellbeing, equity and sustainability that the HSA stood for.

As we navigate our way, however, the lessons from our past victories provide us with valuable signposts towards our future ones.

[1] The Bolivarian Alliance for the Peoples of Our America is an intergovernmental organisation for the social, political and economic integration of the countries of Latin America and the Caribbean that was founded initially by Cuba and Venezuela in 2004.